BY SANDY THEIS
Enquirer Columbus Bureau
COLUMBUS -- Oma Turner watched her 44-year-old husband slowly die in October 1996.
When she was advised that malpractice may be involved, Mrs. Turner filed a lawsuit in Butler County Common Pleas Court.
And she prepared to tell the judge of a case she describes this way: "I didn't just lose my husband. I lost my life."
But her day in court may not come soon.
Just two days after filing the lawsuit, state regulators took control of PIE Mutual Insurance Co., the Cleveland firm that insured the doctor she sued.
Regulators said the company is insolvent and must be liquidated. A Franklin County judge issued an order that stopped all lawsuits against PIE until at least Sept. 30.
The result: Mrs. Turner is among an estimated 3,500 Ohioans whose medical malpractice lawsuits have been thrown into limbo because of PIE's legal and financial problems.
Her lawsuit alleges that a surgeon failed to properly diagnose and treat a gangrenous section of her husband's intestine. The doctor denies any wrongdoing.
"We can't even conduct discovery (evidence gathering). We're frozen in place," said her lawyer, Robert Trainor of Covington. In addition to those with pending lawsuits, some who settled cases against doctors but didn't collect their money before the court action cannot collect it now.
"You can't begin to believe what a mess this is," said Gerry Leeseberg, a Columbus attorney who chairs the PIE Oversight Committee for the Ohio Academy of Trial Lawyers.
PIE -- short for Physicians Insurance Exchange -- used to insure one of every three doctors in Ohio.
Even if Mrs. Turner and others win their cases, damages likely will be capped at $300,000, under terms set by a state fund that insures insolvent insurance companies. PIE's policies were supposed to cover claims up to $5 million.
Mr. Trainor said the uncertainty is taking its toll on Mrs. Turner.
"The financial impact was appreciable," he said. "The emotional impact of his death and the absolute lack of closure that a rapidly pursued malpractice case can bring has caused her emotional problems to worsen."
PIE's problems are taking their toll on taxpayers, too.
Consider:
A state fund that insures failed insurance companies has assessed its members $47 million this year to help cover unpaid claims against PIE doctors. Individuals' insurance premiums could rise because insurance companies that pay the assessments can pass them on to consumers.
So far, Ohio has paid $1.4 million to Calfee, Halter & Griswold -- Republican Gov. George Voinovich's old law firm -- which the state appointed to handle the PIE liquidation. The firm is billing the state $175 an hour, nearly twice the normal state rate of $95 per hour. Leah Pappas, director of special counsel for the attorney general, said the higher rate is justified because of the complex nature of the legal work.
The public is underwriting the cost of criminal investigations by the FBI and others into the relationship between a former top state insurance regulator and PIE executives.
The regulator, David Randall, is scheduled to be sentenced Monday after pleading guilty to felony charges of accepting bribes from a statehouse lobbyist. He has agreed to cooperate with on-going investigations by the Franklin County prosecutor and federal authorities, according to his plea agreement.
Stoking the fury are Democrats who point out that PIE and its executives are major contributors to the Republican Party.
An analysis of state and federal campaign finance reports shows that PIE, its top executives, board members, law firm and their spouses donated at least $1.7 million to the GOP in the decade prior to the firm's collapse, with nearly $800,000 of it coming into Ohio campaign coffers.
In July, Lee Fisher, the Democratic candidate for governor, called for Harold Duyree to resign as director of the Ohio Department of Insurance. Mr. Fisher argued that PIE's problems could have been curbed had Mr. Randall and others in the department done their jobs.
Recently, Bob Taft, the Republican candidate for governor, said insurance officials overlooked "warning signals."
Mr. Duyree, whom Mr. Voinovich appointed to the post in 1991, plans to stay put and said he was unaware that Mr. Randall accepted gifts from health care lobbyist Tom Strussion.
A report by Ohio's inspector general contends that Mr. Randall received gifts and cash from Mr. Strussion. It also states that Mr. Randall's spouse, Courtney, received money from PIE-connected businesses and other companies he regulated. Mr. Randall did not return calls.
In exchange for those payments and other gifts, Mr. Randall wrote a letter to PIE officials declaring that "the company is in good standing with this agency . . . and most important from this agency's perspective, the company can more than meet its policyholder obligations," according to the inspector general's report. At the time of the letter, PIE was on the insurance department's "troubled domestic companies list," the report states.
Court records filed in connection with the state's takeover of PIE accuse the company's top officers of concealing more than $245 million in liabilities and transferring $11.5 million to themselves without board approval.
PIE executives maintain their innocence.
Before the state takeover, PIE had 15,000 policyholders in nine states, including Ohio, Kentucky and Indiana.
Ohio Democratic Party Chairman David Leland likened PIE's collapse to the 1985 collapse of Cincinnati-based Home State Savings Bank. In Home State, however, depositors never lost a dime, but as Mr. Leland notes, Mrs. Turner and others like her could stand to lose a lot.
Policyholders could suffer as well.
That's because claims against PIE doctors are now being handled by the Ohio Insurance Guaranty Association, a nonprofit entity designed to pay claims on behalf of insolvent insurance firms. Companies that pay into the fund already have been assessed $47 million this year -- the maximum allowed -- with most of the assessment attributed directly to PIE, said Guaranty Association President Frank Gartland.
"This may affect rates in the future years," he said, because assessments can be passed on to consumers in the form of higher premiums.
Some plaintiffs' lawyers argue that the fund is not prepared to handle the PIE collapse, which a trade publication recently termed "the worst medical malpractice insurance disaster in history."
Often, hospitals are named as defendants along with doctors. Ohio's hospitals are fearful that unless the courts intervene, or the law is changed, hospitals will be forced to pick up more than their fair share of any malpractice awards.
Under current law, if someone wins a malpractice suit against a hospital and a PIE-insured doctor, the hospital is first in line to pay, even if the court determines that the doctor was responsible for 90 percent of the malpractice and the hospital just 10 percent.
Democrat Wayne Jones, an attorney and former legislator who represents the Ohio Hospital Association, has unsuccessfully lobbied the General Assembly to ease the burden on hospitals.
"This is a very hot political issue this time of year," Mr. Jones said.
In November, seats in half of the 33-members Ohio Senate and the entire 99-member House will be on the ballot.
When the election is over, he predicted, lawmakers will feel more comfortable dealing with the problems of PIE. In the meantime, he said, "nobody wants to talk about this out loud, because if the costs are shifted to hospitals, it affects health care costs." Rep. William Batchelder, R-Medina, and one of the legislature's leading experts on insurance law, contends that economics and not elections are driving the debate.
"If you're going to say that somebody other than the doctors or the doctors' carriers are going to pay, then the question is, "Who should pay? " Mr. Batchelder said.
